As I started planning my summer holidays for this year (yes, I like to be organised) I was struck by the sheer scale of the digital footprint that I was creating. I used Google to search potential destinations, looked at travel reviews, local destination websites, tried to see what the apartment looks like using Google Earth, shopped around travel sites to book my airline, used comparison sites for my car hire and insurance, let everyone know about it on Facebook…and this is all before I even set foot outside of my house. When I finally go on holiday I will of course leave digital traces all the way to and from my destination (Italy as you ask) as I will inevitably access my emails when I am away, let alone be shown up on all manner of travel systems . When I get back I will be uploading your photos, sharing my thoughts online, updating Facebook again etc.
Much of what has historically been a human-to-human activity is now becoming digitized, not only by people such as me trawling the internet but also through the digitisation of back-office systems. Which means, for example, that I now receive my airline booking automatically and the plane capacity is rejigged, prices re-estimated etc. without any human having to be involved.
From all this it is clear that digital is transforming the relationship between brands and consumers. Digital is providing faster and richer relationships that is enabling brands to build better, more effective consumer experiences – even something as simple as being able to see a videocam of the view from my holiday apartment balcony would have been unthinkable a few years ago.
As life is increasingly digital, then what we know about people is increasingly going to come from the digital form; this creates huge opportunities for consumer researchers. I think you could figure out a pretty good understanding of the kind of person that I am simply by looking at the digital footprint associated with my summer holiday. Which means that we can increasingly build up a picture of consumer lives, mind-sets, attitudes and motivations purely from their digital footprint.
Of course digital analytics has long been an area of investment for brands to optimize their web-sites, search terms and so on so that they can increase the follow of traffic and maximise sales although the full range of brands digital assets is often under exploited. Recently McKinsey has been discussing the merits of large scale data gathering and analytics to shape strategy, giving it the umbrella title of ‘Big Data’. They argue that too few companies fully grasp Big Data’s potential in their business thus losing a potentially valuable competitive edge.
At GfK, we fully support this thinking but have a somewhat different emphasis. Our ‘Smart data’ approach is about putting the consumer at the centre of the analysis as opposed to the brand’s digital assets and their efficiency or otherwise occupying the centre role. By doing this we can understand much more about consumers themselves which, of course, has even bigger benefits for brands wishing to create the best possible digital experience for consumers. So we can understand, for example, the way in which consumers research and buy products or how they are influenced by digital marketing or social media content concerning brands. If analysis is limited to the brand’s digital assets then at best very limited information can be gleaned about the wider digital lives and behaviours of consumers.
We believe there are five cornerstones to this emerging new practice area:
Capture: Although brands are able to capture the digital activity that passes through their own assets, they will not see the activity that sits outside of these. This is critical for generating an holistic view of consumers’ digital lives beyond the mode of interaction with one brand. The challenges here are immense but we are making use of large global panels of consumers to achieve this. Here we recruit a representative sample of consumers and then use electronic means to track their digital activity across devices, as well as collecting a range of personal and attitudinal data through more traditional survey methods.
Measure: A key challenge is how we go about generating measures or ‘metrics’ from digital data; contrary to traditional consumer research approaches, we have to create and impose our own structures on the inevitable myriad of data in order to create any meaningful metrics. At the moment there are few industry standard digital metrics that are revealing of consumer mindsets in the way, for example, that ‘customer satisfaction’ has in more mainstream consumer research.
Integrate: By retaining the more traditional tools in the consumer researcher’s kit bag (e.g. surveys, qualitative interviews) we can help to fill in some of the inevitable gaps in our understanding but we can also get more insight into what different digital activities actually mean (e.g. what does it mean if people sometimes spend a long time before they confirm actions?)
Modelling: A critical challenge is to understand the relationship between different forms of digital activity, e.g. are there digital activities that brands undertake which lead to particular consumer outcomes (e.g. change in brand perception)? Frameworks are being developed here that have their legacy deep in social psychology but applied to the digital world.
Transform: The end point of Smart Data is to understand how brands build more effective digital experiences; the key issue is how can brands generate new, more facilitating relationships with consumers by using digital profiling? If brands can better understand the ‘digital psychology’ of consumers then we should expect a much enhanced digital experience.
Smart Data involves the creation of new methodologies across the consumer researcher spectrum but in areas which are very familiar to those working in consumer research – identifying and creating data collection methods, design of data capture tools, analysis and modelling. It also involves the creation of a whole new set of metrics which not only accurately summarise the digital behaviours being exhibited but also start to tell us something much more insightful about the people behind these behaviours.
The real power of Smart Data lies in the integration the digital and ‘traditional’ market research approaches to create a coherent understanding of the consumer. Those that can best harness the power of integrated digital data will add tremendous value to business strategy and decision making, way beyond the industry’s current level.